Result Update: Gabriel India Ltd - BUY - TP Rs.193 - Kotak

In 4QFY18, Gabriel reported strong revenue growth arising from robust volume growth across segment and market share gains. Gabriel's revenue and EBITDA came in ahead of our estimates.

Key Highlights

On the back of robust volume growth Gabriel reported 28% YoY growth in revenue. Company witnessed revenue growth across segments. EBITDA grew by 24% YoY and 15% QoQ to Rs464mn and the same was ahead of our estimate of Rs439mn. Higher tax limited PAT growth to 14% YoY.

Valuation and Outlook

On the back of pick-up in demand in rural areas, we remain positive on strong two wheeler volume growth in FY19/FY20. Gabriel generates 55% of revenues from the two wheeler segment and should benefit accordingly. On account of new capex plans announced by the company and slower than expected increase in EBITDA margin, we lower our FY19/FY20 estimates. We like the company on account of expected healthy earnings growth, high RoE, strong cashflows and net cash status. We retain BUY on the stock with revised price target of Rs193 (earlier Rs222).

Shares of GABRIEL INDIA LTD.-$ was last trading in BSE at Rs.148.85 as compared to the previous close of Rs. 147.15. The total number of shares traded during the day was 20038 in over 322 trades.

The stock hit an intraday high of Rs. 151 and intraday low of 145. The net turnover during the day was Rs. 2980042.

Source : Equity Bulls

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